Bogle underscores the critical role of determining the right mix of stocks and bonds in an investment portfolio. He cites Benjamin Graham’s recommendation of a 50/50 split as a starting point but acknowledges that individual circumstances will dictate adjustments. 'The asset allocation decision accounts for 94% of the variation in portfolio returns,' making it the most crucial investment choice. Bogle advises adjusting the stock-to-bond ratio based on risk tolerance and life stages. | John C. Bogle | The Little Book of Common Sense Investing

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Finance

The Importance of Asset Allocation

Bogle underscores the critical role of determining the right mix of stocks and bonds in an investment portfolio. He cites Benjamin Graham’s recommendation of a 50/50 split as a starting point but acknowledges that individual circumstances will dictate adjustments. 'The asset allocation decision accounts for 94% of the variation in portfolio returns,' making it the most crucial investment choice. Bogle advises adjusting the stock-to-bond ratio based on risk tolerance and life stages.

-- John C. Bogle